Inauguration Day, Good Luck
Independent Investment Research

by John Dalt

01/20/09  

The market sold off throughout the session today. It started down, paused during the swearing in ceremony, and then accelerated like kids on a wagon rolling down a steep hill. The market is looking to the financial sector for leadership. The Royal Bank of Scotland (RBS) reported the biggest loss in British corporate history on Monday. State Street Corp (STT), the world’s largest institutional money manager piled on the bad news by announcing a $6.3 billion unrealized loss on its investment portfolio. State Street shares plunged 59%, taking J.P. Morgan, Citi, and Bank of America with them. Reading headlines on the news services, I see comments that it might be time to look at financials since they are so cheap right now. This combined with the VIX index shooting up 22.8% today, may foretell a mini rally in the making. A little press, investor fear and the financials being so oversold may set up a rally for the new president. If we can get a small rally, I suggest you sell into it everything you can. I have been trying, but the highs are lower, and the lows are lower. I cannot seem to get out of some of my swing trades. A small rally causes my hope to spring eternal for even higher quotes. The result is I wait for a bigger gain, and end up holding my positions through another down cycle. I encourage you to look at the SPX or the DJI on a 15-year chart. It might scare you, we are flirting with the lows of April 1997, if we bust through, it might scare me!

Inauguration Day has arrived and passed. We have a new President, God Bless our Country. I had hoped to pay attention to business today, but found it impossible, as even the business networks covered the inauguration wall to wall. In retrospect, I am glad I watched it. Our country is truly blessed, a bunch of dead white guys were pretty smart. It is too bad we do not follow what they wrote 232 years ago. I wish our new president good health and pray that he protects our country from outside attacks and influence from our enemies. The foreign policy challenges are formidable in a world ruled by force, intimidation and deception. Absent from my well wishes to the new president is any hope that he is successful in passing his domestic agenda or having any lasting impact on the future of our country. The fawning over the new president by the national media is truly embarrassing. I heard one national anchor say, “Obama just causes a twitch to go up my leg.” After being married for over 20 years, I can honestly say I have not had a twitch up my leg for a few years. However, I am ever hopeful.

 Hail to the Chief!

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions. It may contain errors and you should not make investment decisions based solely on what you believe you have read here. Do your own research, it is your money. If you lose it, it is your responsibility, not ours or your grandmothers! The editor may or may not have a position in any securities discussed. The editor may have held a position in a security earlier, or in the future.

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